The Money Brief #12 - 06 July 2026

If you’ve felt poorer these past few years, you’re not imagining it, and this week a big report put a number on it. Strangely, the UK stock market did the exact opposite, climbing to its highest in months. Both are true, and the gap between them is worth five minutes of your time.

Here’s a puzzle from this week. A major report found that the typical Briton has got poorer over the last five years. At the same time, the UK stock market climbed to its highest in months. Both are true. So what is going on?

First, the poorer bit. The Swiss bank UBS runs a big yearly study of household wealth around the world. Its latest, out on 1 July, found that the average adult in Britain saw their wealth fall by 23% in real terms between 2020 and 2025. That was the sharpest drop of any wealthy country it looked at. South Korea, for contrast, saw the biggest rise.

Why us? In plain terms, we had a nastier bout of inflation than most, our energy bills hit harder, and house prices did little. UBS’s own economist makes one honest point worth holding onto: because our inflation ran so high, it makes the fall look worse than it really feels. This is a five-year measure, not a sign you woke up 23% poorer this morning.

Now the markets. On the same few days, the FTSE 100, the index of the UK’s 100 biggest listed companies, rose to its highest since the spring. Germany’s market and the wider European market hit record highs. The trigger was weak US jobs data, which cooled fears that American interest rates might rise again.

So how do both happen at once? Because the stock market is not the economy, and it certainly is not your bank balance. Share prices look forwards, they’re driven by giant global companies, and they can climb while households at home feel squeezed. The two often drift apart.

Put simply: the market having a good week does not mean the country is, and it does not mean you are. Worth remembering the next time a green day on the markets makes the headlines.

Sources: UBS Global Wealth Report 2026 (1 July); Irish Times, Investing.com (2 July 2026).

Here’s a sign of how that squeeze is showing up in real life. In May, the number of people getting a mortgage approved to buy a home fell sharply, down about 15% in a single month, to the lowest level since December 2023. That’s from the Bank of England’s own figures, published this week.

Approvals are an early signal of how many sales will complete later, so a drop like this points to a quieter housing market ahead. Remortgaging fell too, as people whose deals are ending sit tight rather than lock in a new rate. The reasons are the usual mix: higher costs, a wobbly economy, and uncertainty about where rates go next. One broker described buyers starting to “sit on their hands” and wait.

On rates themselves, the mood has shifted more than the number. The Bank of England held its base rate at 3.75% for the fourth time in a row on 18 June, and the next decision is 30 July. But the direction of travel has changed. At the start of the year, two cuts were expected in 2026. Once the Middle East conflict pushed energy prices up, those cuts came off the table, and at the last meeting two of the nine rate-setters voted to raise rates to 4%, up from just one in April.

So where next? Forecasters are split. A few expect a small rise as soon as this summer, while the more cautious view, which markets currently lean towards, is a long hold at 3.75%, perhaps with one rise into early 2027 and no cuts returning until later. A Reuters poll of economists found most expect a hold for the rest of this year, nearly 40% expect at least one rise, and only a handful a cut. Either way, the run of cuts many had pencilled in for 2026 has quietly vanished.

What it means for you. If you’re on a tracker, your rate only moves when the Bank does, so nothing changes for now. If you’re on a fix, deals eased from their spring peak as the war premium faded, but with cuts off the table the big falls some hoped for look unlikely for the moment. If your current deal ends in the next six months, it may be worth understanding your options sooner rather than later.

Sources: Bank of England (rate decision 18 June, 7–2 vote; Money and Credit, 29 June); Reuters economist poll; HomeOwners Alliance market pricing (2 July 2026).

Back to that puzzle from the top, because this is where it gets useful for your pension.

The spark for this week’s rally came from an unlikely place: a weak jobs report in America. US employers added far fewer jobs than expected in June. Normally that sounds like bad news, and for the economy it is. But investors read it differently. Fewer jobs means less pressure for the US central bank to raise interest rates, and lower rates tend to be good for shares.

So markets rose on “bad” news. The UK’s FTSE 100 jumped 1.7% in a day to its highest in months, and Germany’s main index hit a record. This is one of the odder truths of investing: the stock market often cares more about where interest rates are heading than about how the economy actually feels on the ground.

Why it matters for you. If you have a pension, you almost certainly own a slice of these markets, usually through funds that track the UK and the wider world. So a week like this quietly nudges your pension up, even if your own finances feel no different.

The honest caveat, as always. This rally was driven by hopes about rates, not by a stronger economy, and it was uneven. Technology and chip shares actually fell, and trading was thin around the US holiday. Moves powered by rate expectations can reverse just as quickly when those expectations change. A good week is just that: a week.

Sources: Investing.com, Irish Times, Proactive Investors / IG (2 to 3 July 2026).

A quick check of the major coins, because the mood is best read across the board rather than from one price.

Bitcoin is hovering around $62,500, with Ethereum, XRP, BNB and Solana broadly steady alongside it. Zoom out, though, and 2026 has been a down year for most of crypto, with the broad market off roughly 30% since January.

There’s no single dramatic story this week, which is worth noting in itself. After a bruising few months, a calm patch can feel like relief. But calm and stable are not the same thing in crypto, which is exactly what the warning below is about.

Crypto assets are high-risk and largely unregulated in the UK. Values are extremely volatile. You could lose all the money you invest. This is not investment advice. Never invest more than you can afford to lose.

While the markets celebrated, the picture at kitchen-table level looked very different.

New figures from the Bank of England this week showed the biggest jump in people falling behind on credit cards and other unsecured borrowing since 2009. In the Bank’s survey, a net 37% of lenders reported that defaults had risen over the last three months, up sharply from 19% the quarter before. That figure is the balance of lenders seeing a rise, not the share of people defaulting, but the direction is clear: more households are slipping behind than at any point since the last financial crisis.

Here’s the telling part. Missed payments on mortgages did not rise. It’s the credit cards, the overdrafts and the personal loans where people are slipping, and credit-card borrowing is up 12% over the past year. That tells you something about how families are coping: the mortgage gets paid first, and the flexible debt absorbs the strain.

It fits the wider story. Wages have struggled to keep pace with prices for years, energy is up again this month, and the savings buffer many built in the pandemic has thinned. So even as the headlines cheer a rising market, more people are quietly juggling to stay on top of the bills.

If that’s you, the most useful thing to know is that free, non-judgemental help exists, and reaching out early makes a real difference. StepChange, National Debtline and Citizens Advice all offer it, and none of them will charge you a penny.

Sources: Bank of England Credit Conditions Survey and Money and Credit (2 July 2026).

You’ve probably seen the adverts. “Claim your car finance refund now.” This week the story took another turn, so here’s what it’s really about, and how to make sure any money owed to you stays yours.

First, the background. Between 2007 and 2024, millions of car finance deals paid the dealer a hidden commission that could go up if they charged you a higher interest rate (This was known as discretionary commission). Often, nobody told the customer. The courts have ruled that this broke the law, and the regulator, the Financial Conduct Authority (FCA), set up a scheme to pay people back. Around 12 million agreements could qualify, with a typical payout of roughly £829.

Now the twist. This week, a tribunal paused parts of the scheme while some lenders challenge it in court. Those hearings are not until late this year or early next, so payments that were due this summer now look unlikely to start before 2027, and possibly later. Frustrating, but it does not change whether you’re owed money, only when it might arrive.

Here’s the part the adverts will not tell you. You do not need to pay anyone to claim. The claims-management firms flooding your feed typically take a cut of your payout, often 30% or more, for filling in a form you can complete yourself in minutes. You can check and complain for free, directly with your lender, and MoneySavingExpert has a free car finance reclaim tool that walks you through it.

https://www.moneysavingexpert.com/reclaim/reclaim-car-finance/

So if you had car finance between 2007 and 2024, it could be worth checking whether you’re owed anything. Just keep the whole refund, rather than handing a third of it to someone for a job you could do over a cup of tea.

Sources: Financial Conduct Authority; Reuters; MoneySavingExpert (2 July 2026).

That’s your five minutes. If someone you know is being chased by those car finance claims adverts, forward them this. Knowing they can do it free could save them hundreds.

Coming up, we’re digging into a big one: does going to university actually pay off? New figures suggest today’s graduates could earn tens of thousands less over a career, and we’ll put the numbers behind it, including what different student loans really cost. Plus the new chancellor should be confirmed around 20 July, and the Bank’s next rate call lands on 30 July.

Look after your money. It’s on your side more than you think.

Follow us between briefs for mid-week updates and the data points worth knowing:

Thank you,

Ellis

themoneybrief.co.uk

The Money Brief. Not financial advice. The Money Brief provides news and commentary for informational purposes only. We are not FCA-regulated. Crypto and investments can go down as well as up. Always consult a qualified adviser before making financial decisions.

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